Background and Impacts of Taiwan s Decision to Cancel Fourth Nuclear Power Plant Construction

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1 Special Prompt Report Background and Impacts of Taiwan s Decision to Cancel Fourth Nuclear Power Plant Construction November 15, 2000 Yuichi Kawai, Senior Researcher Environment Group, IEEJ On October 27, Prime Minister Zhang Zun-Xiong of Taiwan announced that the Executive Yuan decided to cancel construction of Taiwan s fourth (popularly called Long Men) nuclear power plant, under way in Gong Liao Xiag Ren Li, a coastal village situated 40km northeast of Taipei. This announcement triggered political confusions, which make the future of the Chen Shui-bian administration murky, not to mention the uncertainty if or not the order to scrap the construction project can completely be enforced. The background, significance and impacts of the decision are discussed below. 1. Facts behind the Decision 1-1 Contract partners A consortium of GE, Toshiba and Hitachi constructs two 1.35 GW-class ABWRs, the same type as Kashiwazaki-Kariwa Nos. 6 and 7 reactors. Mitsubishi Heavy Industries Ltd. supplies turbine generators, and Tokyo Electric Power Company offers full-range supports from materials management to building processes, plant operation, maintenance and safety control to this ABWR construction project. 1-2 Grounds for the cancellation (cited by the government) A sufficient electricity supply capacity is secured without the fourth nuclear power plant. 1

2 Alternative energy plan (LNG-fired power plant construction) is available. Difficulties involved in radioactive waste disposal Fears for reactor accident (The same type of reactors running in Japan registered a doubled shutdown rate than the other types.) Very high construction cost Enhancing sustainable economic development and construction of post-nuclear power plant system. Electricity supply and demand is not tight in Taiwan. 1-3 Reactions in the political world In protest against the recent decision to cancel the fourth nuclear power plant, the Kuomintang (KMT)-led opposition parties got united and moved to raise a bill to recall President Chen Shui-bian, which threw Taiwan into a political chaos. On November 6, President Chen Shui-bian apologized for the confusion, but the opposition forces do not yet withdraw their claims for his resignation. Given the opposition parties denunciation of the decision as violating the constitution, the Executive Yuan left, November 8, the matter to a judicial judgement. 2. Appraisal 2-1 Electricity supply and demand Outlook Taiwan Power, a joint-stock company invested by the government (the Ministry of Economy), monopolizes all electricity businesses of production, transmission, and distribution in Taiwan including islands, but power purchases from some IPPs. The Nuclear Energy Commission under the direct control of the Executive Yuan (cabinet) is responsible for policy-making, R&D and rulemaking on nuclear power. At present, a total of six reactors (5,144 MW, or 18.06% of total installed capacity) listed below are in operation. 2

3 First (Jin Shan) Plant, Nos. 1 & 2 reactors (BWR 636 MW x 2 units) Second (Guo Sheng) Plant, Nos. 1 & 2 reactors (BWR 985 MW x 2 units) Third (Ma An Shan) Plant, Nos. 1 & 2 reactors (PWR 951 MW x 2 units) In 1998 they produced 36,907 GWh (25.32% of total generated output). The Executive Yuan has a plan to enhance LNG-fired power plant construction as an alternative source to nuclear power in the future. But, it is not clear when the plant can be built due to scant progress made in pipeline construction designed to forward natural gas from the unloading terminals in the south. Due to the Asian financial crisis and the giant earthquake, which caused pullouts of some small- and medium-sized firms as well as capital outflows from Taiwan, the Taiwanese market currently suffers economic stagnation, though partially. On this account, the Ministry of Economy s argument that electricity supply is sufficient up to 2007 sounds plausible in some point. Also, in the future, opening of the electricity market to IPPs and privatization of Taiwan Power is expected to increase efficiency of power production system. Yet, right now, Taiwan s electricity demand is growing as high as in the past Consideration for global warming problems Taiwan, not a member of the United Nations, nor naturally liable for any reduction target under the Kyoto Protocol, has no obligation about greenhouse gas emissions. In this context, it may be all right to say that the Taiwanese are little conscious of global warming abatement when selecting their power sources. So far as they have few restraints on their choice of power source, certainly they can meet their electricity needs without nuclear power. 2-2 Nuclear power policy of the DPP The Democratic Progressive Party(DPP) has advocated for getting out of nuclear power for years, to begin with. It was a public commitment pledged by the DPP during the presidential 3

4 campaign, and the ruling party just fulfilled the promise. It means the DPP considers an action to scrap existing nuclear power plants ultimately. But, reportedly, there are some differences of positions between each DPP members on this policy. The two primary grounds for the cancellation cited by the DPP are refuted as follows. Absence of well-established radioactive waste disposal methods Unless all currently running reactors should immediately be shut down, this argument is nonsense and cannot be a reason for canceling the fourth plant construction. The DPP reportedly hopes to shut down the reactors in operation as well, but it is impossible for energy supply reasons. Therefore, a question of whether the fourth nuclear power plant is built or not should be considered from the conventional arguing point of energy supply and demand alone. Safety of ABWR ABWR is the newest type of reactor. The No. 6 reactor installed at Kashiwazaki-Kariwa is the first of its type, which was commissioned in November Its shutdown records belong to the so-called initial-stage failures. Usually the failure rate of equipment is called a bathtub curve. It is because many failures tend to occur during the initial and last days of operation. The still young ABWR can naturally register a larger number of shutdowns than other types of BWR having reached the stable stage. To compare the two in the number of shutdowns regardless of the length of their history is wrong as a method of evaluation. Many of the learned people have a view that the DPP should regard the ideology of anti-nuclear group as important, for maintaining their political power. Therefore, the DPP should have given up a realistic choice in electricity supply and demand, and have made such a radical action of taking the abrupt decision to cancel the plant construction, which is already under way, as a symbolic policy. Neither energy policy nor global warming abatement was found among the eight-item priorities announced by Prime Minister Zhang Zun-Xiong after his inauguration. This 4

5 explicitly suggests that energy issues are respected little in Taiwan today. And, the subsequent scrap-the-fourth-plant order can be viewed just as a political decision designed to dissipate the discontents among the anti-nuclear forces within the DPP (with the party leaders who failed to include energy issues, particularly anti-nuclear policy, in the announced priorities). 2-3 Public opinions Among the opinion polls by the Taiwanese newspapers, the one conducted by the China Times showed that 31% approved the decision to cancel the plant construction, and 42% disapproved. However, questioned about the Chen administration, 44% answered they were satisfied, which outnumbered 41% who were unsatisfied. On the other hand, the Unit News opinion poll found that 31% approved the decision and 50% disapproved. With President Chen, 39% were satisfied but 48% unsatisfied. The ratio of those who are against nuclear power has been inching up. Those who consider the nuclear issue from the energy supply-demand and global warming standpoints are taking a pro-nuclear stance. Among others, the pro-nuclear forces base their arguments on energy security and the economic growth of Taiwan. 3. Impacts 3-1 Contract partners Though details of this project s contracts are unknown, all contracts usually contain a provision of indemnity. This sort of provision generally requires any party, if canceling a contract one-sidedly, to pay to the other parties not merely the costs already expensed but also a penalty at a prescribed ratio of contract values depending on the timing of cancellation. Perhaps, the firms involved in the Taiwanese project won t suffer monetary losses unless they should have signed unfairly disadvantageous agreements. However, there will be a negative impact that the firms are 5

6 deprived of a chance to accumulate records of ABWR operation, which means they lose an opportunity to verify the operation of ABWR. 3-2 Impacts on Japan s nuclear power policy Whenever media report a foreign government s nuclear power policy I always argue that we should not easily be affected by foreign situations. It is because the foreign government s nuclear power policy might be part of the best energy policy that each government drew from its own domestic situations. Speaking of Japan, it is very hard to reduce GHG emissions to the target levels at one hand, and secure a new power source as massive as nuclear power at the other hand. If we have to pay due consideration to energy security as well, the present energy policy that features a mix of energy sources of various kinds including nuclear, is an avoidable choice. Even in the event of a Prime Minister change, there are stern realities where no statesman, when urged to make a pragmatic choice, is capable of dropping the nuclear option simply based on his personal belief. For this reason, what policy is taken in Taiwan naturally has few impacts on Japan s nuclear power policy, other than handling many inquiries from mass media. Regretfully, this time again, a few Japanese papers circulated nationwide predicted some impacts on Japan s nuclear policy. We believe it is about the time to give up indulging in a single-minded debate concentrating in whether nuclear power is good or bad, and whether we should adopt it all or skip it all. Instead, it is impossible to head for a constructive direction to consider Japan s overall energy supply first, and then examine what power mix is the best. 6